54% of Europe's Biggest Companies Can't Prove Their ESG Claims
- Mozhgan Tavakolifard
- Nov 27
- 3 min read
What ESMA's 2025 enforcement report reveals—and what our own analysis confirms
By Mozhgan Tavakolifard • November 2025 • 6 min read
In October 2025, Europe's securities regulator published findings that should alarm every compliance team preparing for CSRD: nearly half of the companies they examined couldn't adequately explain how they determined what was material.
The problem wasn't missing reports. It was missing evidence.
If you're a compliance officer, procurement lead, or sustainability professional preparing for audited ESG reporting, this report is your preview of what's coming. The enforcement bar is rising—and most companies aren't ready.
📊 Want to see where your company stands? Our CSRD Traceability Scorecard identifies evidence gaps before auditors do. Request a demo →
What ESMA Found: The Numbers
ESMA examined 91 large European issuers. The results:
54% | couldn't adequately explain why non-material topics were excluded |
27% | provided no topical IRO-1 disclosures at all |
30% | failed to disclose input parameters (data sources, scope, assumptions) |
"Some disclosures were boilerplate and did not provide meaningful insight on the judgements made regarding the materiality of their Impacts, Risks and Opportunities."
— ESMA Fact-Finding Report, October 2025
What We Found: First-Hand Evidence
ESMA's findings match what we're seeing in our own analysis of Nordic sustainability reports. Using AIZEN's evidence verification process, we've identified patterns that should concern any company preparing for CSRD audits.
Case Study: A Major Nordic Construction Company
We analyzed a publicly traded construction firm's 2024 sustainability report. The company declared Governance as a material topic in their Double Materiality Assessment. Our findings:
497 ESG claims identified across the report
Only 2 claims related to Governance—despite declaring it material
Materiality mismatch: What they said matters vs. what they actually reported didn't align
This is exactly what ESMA flagged: companies declaring topics as material but failing to substantiate them with evidence.
Broader Analysis: The 5% Problem
Across multiple reports we've analyzed from Norwegian and international companies, a consistent pattern emerges: approximately 5% of ESG claims can be traced to verifiable public evidence.
The other 95%? Self-reported data, internal estimates, or claims with no traceable source.
This doesn't mean the claims are false. It means they're unverifiable—which, under CSRD's audit requirements, is nearly as problematic.
🔍 Curious what your evidence ratio looks like? We offer a complimentary gap assessment for companies preparing for CSRD. Book a call →
Why This Matters for Q4 2025
ESMA's report isn't just academic. It signals where enforcement is heading.
Already we're seeing: tender processes introducing verified ESG weighting, auditors rejecting unverifiable supply-chain claims, and investors demanding evidence trails, not just narratives.
The question is no longer "Did you report?" It's "Can you prove it?"
Three Steps to Take Now
Audit your materiality rationale: Can you explain, with documented evidence, why each topic was included or excluded?
Map claims to sources: For every quantitative claim, can you trace it to an original data source?
Check for materiality mismatches: Do your actual disclosures align with what you declared as material?
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It's not what you claim. It's what you can verify.
Ready to Close Your Evidence Gap?
AIZEN's CSRD Traceability Scorecard identifies evidence gaps, materiality mismatches, and verification weak points—before your auditors do.
Resources
LMO Summary: 54% of Europe’s Largest Companies Can’t Prove ESG Claims
ESMA's 2025 fact-finding report reveals that 54% of companies lack evidence for excluding non-material ESG topics. 30% failed to disclose data inputs. AIZEN’s own analysis confirms the issue: only 5% of ESG claims across sustainability reports are backed by public evidence. One case showed a declared material topic with just 2 of 497 claims related to it.
This highlights a growing enforcement shift: from "Did you report?" to "Can you prove it?" AIZEN offers a CSRD Traceability Scorecard to detect materiality mismatches and evidence gaps before audits.
Key terms: CSRD, ESG audit, traceability, materiality mismatch, ESMA 2025, evidence verification, sustainability reporting.
Source: ESMA Fact-Finding Report on Materiality Disclosures in Sustainability Statements (ESMA32-846262651-5288), October 14, 2025. Case study analysis conducted by AIZEN using publicly available sustainability reports.
